Tim Cook's Comment Hints at Bottom for Memory Chip Stocks?

According to Yahoo Finance, Apple (AAPL-US) CEO Tim Cook may be leaving investors with a final 'gift'—a potential bottoming signal for memory chip stocks that have sharply declined.

Adam Turnquist, technical strategist at LPL Financial, said investors can interpret Apple’s comments on memory pricing as an indication that the recent sell-off in memory chip stocks may have been overdone.

Turnquist noted, 'We’re starting to see some technical signs of potential bottoming in certain individual stocks. These stocks experienced historic rallies but pulled back over 50% in a very short time. I think the key context here is that these stocks rose over 100% in an extremely short period.'

Cook: Memory Prices Facing a 'Century Flood'

Apple issued a more conservative revenue outlook for the current quarter during its earnings release on Thursday, citing insufficient access to memory chips to meet demand—and Cook expects this issue to persist.

On product pricing, Cook stated, 'Regarding price, we were very reluctant to raise prices. The reason is, I believe memory prices are currently experiencing a century-level flood, rising at an exponential rate.'

Demand for high-bandwidth memory (HBM) and advanced DRAM for AI servers continues to outpace supply, tightening the overall memory market.

Major suppliers such as SK Hynix (SKHY-US), Samsung Electronics, and Micron (MU-US) have nearly sold out their high-end AI memory production capacity through 2026. Key customers like NVIDIA (NVDA-US), Microsoft (MSFT-US), Amazon (AMZN-US), and Meta (META-US) are racing to expand their AI infrastructure.

Supply shortages have significantly driven up memory prices, restoring stronger pricing power to suppliers after years of market downturn. Experts widely expect tight memory supply conditions to last until 2027, creating a favorable environment for large memory manufacturers.

This supply-demand dynamic pushed memory stocks like SanDisk (SNDK-US) and Micron (MU-US) to record highs by late June. However, since then, concerns about excessive capital spending by big tech firms on AI have triggered sharp corrections.

Per Yahoo Finance AlphaSpace data, SanDisk and Micron fell 46% and 30%, respectively, over the past month.

Yet, Apple’s latest earnings suggest investors may have turned pessimistic too quickly, as the fundamental drivers supporting the memory industry have not fundamentally changed.

Turnquist pointed out, 'This kind of correction is part of the market. When stocks become excessively overbought and trading becomes crowded, they typically retest support levels. I believe memory chip stocks are currently undergoing exactly that process.'